TLGT Teligent Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 2, 2015

 

 

IGI LABORATORIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		001-08568		01-0355758
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

105 Lincoln Avenue
Buena, New Jersey 08310
(Address of principal executive offices and zip code)

 

Registrant’s telephone number, including area code: (856) 697-1441

 

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

  

Item 2.02.

Results of Operations and Financial Condition.

 

On March 2, 2015, IGI Laboratories, Inc. (the “Company”) issued a press release announcing the Company’s earnings for the fourth quarter and year ended December 31, 2014 and certain other information. A copy of the press release is attached hereto as Exhibit 99.1.

 

The Company will conduct a conference call to review its financial results on March 2, 2015, at 4:15 p.m., Eastern Time.

 

The information, including Exhibit 99.1, in this Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, except as shall otherwise be expressly set forth by specific reference in such filing.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)	The following exhibit is filed with this Report:

 

Exhibit No.		Description
99.1		Press release of IGI Laboratories, Inc. dated March 2, 2015

 

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		IGI LABORATORIES, INC.
	By:	/s/ Jenniffer Collins
	Name:	Jenniffer Collins
	Title:	Chief Financial Officer

 

Date: March 2, 2015

 

 

 

 

 

Exhibit 99.1

 

News From:

 

 

Release Date: March 2, 2015

 

Contact:	Jenniffer Collins
	IGI Laboratories, Inc.
	(856) 697-1441
	www.igilabs.com

 

IGI LABORATORIES ANNOUNCES FOURTH QUARTER and YEAR END 2014 RESULTS

 

BUENA, NJ - (PR NEWSWIRE) – IGI Laboratories, Inc. (NYSE MKT: IG), a New Jersey based specialty generic pharmaceutical company, announced its financial results for the fourth quarter and year ended December 31, 2014.

 

Fourth Quarter and Year to Date 2014 Highlights

 

·

Total revenues of $13.7 million in the fourth quarter of 2014, an increase of 104% over the same quarter in 2013

·

Total revenues of $33.7 million for the year ended December 31, 2014, an increase of 85% over the same period in 2013

·

Total net revenues generated from the sale of IGI label generic topical pharmaceutical products for the three and twelve months ended December 31, 2014 of $10.5 million, and $19.8 million, respectively

·

Gross profit for the year ended December 31, 2014 equaled 50% as compared to 34% in the same period of 2013

·

IGI filed eleven Abbreviated New Drug Applications (ANDAs), in 2014 with the U.S. Food and Drug Administration (FDA)

·

Net income was $5.6 million in the fourth quarter of 2014, including a non-cash gain of $2.3 million, compared to $0.7 million in the same period in 2013

·

Net income was $5.3 million for the year ended December 31, 2014, including a non-cash gain of $2.3 million, compared to a net loss of $0.1 million for the year ended December 31, 2013

 

IGI’s President and Chief Executive Officer, Jason Grenfell-Gardner, stated, “This year was a critical one for our team, and I believe we have delivered. At the beginning of 2014, we committed to increase revenue to $25.5 - $26.4 million for the year, achieve profitability, and to double our R&D spending while filing ten ANDAs. We increased our commitment in October of 2014 to $31.0 to $33.0 million in revenue for 2014, gross margins of approximately 50 percent, and we re-affirmed our expectation to file at least 10 ANDAs in 2014. Our team has delivered on these promises. Revenue grew 85% compared to 2013, and while we did increase R&D spending by 150%, we filed 11 ANDAs, and we were able to achieve $5.3 million in net income, including a non-cash gain of $2.3 million. On top of all these achievements, we were able to make two product acquisitions at the end of September as initial drivers of our TICO strategy.” Mr. Grenfell-Gardner continued, “In December we completed our offering of $143.75 million 3.75% Convertible Senior Notes, which net of fees and expenses helped to strengthen our balance sheet to include over $158 million in cash at the end of December. Our balance sheet is stronger than ever, and we are actively seeking to expand our product portfolio and manufacturing capabilities to execute on our TICO strategy to expand our topical, injectable, complex and ophthalmic presence in the specialty generic pharmaceutical markets. Our research and development team now has twenty-two ANDAs pending with the FDA. Based on December 2014 IMS Health data, the addressable market for our pipeline of twenty-two ANDAs, pending approval by the FDA, is estimated at $579 million. We believe we are well positioned to increase revenues to at least $55 to $57 million in 2015, which would lead to increased gross margins of between approximately 52 to 53 percent for 2015.  As we continue to invest in R&D to drive our future growth, we expect to increase R&D expense to approximately 27 to 28 percent of total revenue in 2015, which would allow us to file at least twenty more ANDAs in 2015.  Based on the foregoing, we would anticipate Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) to range between $7.5 and $8.5 million in 2015.” 

 

  

The Company will hold a conference call today at 4:15 pm ET to discuss 4th quarter 2014 results.

 

The Company invites you to listen to the call by dialing 1-888-346-3479. International participants should call 1-412-902-4260. Canadian participants should call 1-855-669-9657. Participants should ask to be joined into the IGI Laboratories, Inc. call.

 

This call is being webcast by MultiVu (a PR Newswire Company) and can be accessed in the Investor Relations Section of IGI's website at www.igilabs.com.

 

  

About IGI Laboratories, Inc.

 

IGI Laboratories is a specialty generic pharmaceutical company. Our mission is to be a leading player in the specialty generic prescription drug market.

 

Forward Looking Statements

 

This press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions, and other statements contained in this press release that are not historical facts and statements identified by words such as " will," “believe,” “target,” “estimated,” "continue" or words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to various risks and uncertainties, including those included from time to time in the "Risk Factors" and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in our most recent Annual Report on Form 10-K, as updated by Quarterly Reports on Form 10-Q and other reports we file with the Securities and Exchange Commission. Actual results may differ materially from these expectations. Factors that could cause actual results to differ materially from these expectations include, but are not limited to: our inability to meet current or future regulatory requirements in connection with existing or future ANDAs; our inability to achieve profitability; our failure to obtain FDA approvals as anticipated; our inability to execute and implement our business plan and strategy; the potential lack of market acceptance of our products; our inability to protect our intellectual property rights; changes in and the impact of global political, economic, business, competitive, market, regulatory and other factors; and our inability to complete successfully future product acquisitions. We assume no obligation to update any forward-looking statements or information, which speak as of their respective dates.

 

Non-GAAP Financial Measures

 

In addition to reporting financial information required in accordance with U.S. generally accepted accounting principles (GAAP), IGI Labs is also presenting EBITDA and Adjusted EBITDA which are non-GAAP financial measures. Since EBITDA and Adjusted EBITDA are non-GAAP financial measures, they should not be used in isolation or as a substitute for consolidated statements of operations and cash flow data prepared in accordance with GAAP. In addition, IGI's definition of Adjusted EBITDA may not be comparable to similarly titled non-GAAP financial measures reported by other companies.

 

Adjusted EBITDA, as defined by the Company, is calculated as follows:

 

Net income, plus:

 

Interest expense, net

Provision for income taxes

Depreciation and amortization

Amortization of acquisition costs related to Econazole purchase

Non-cash expenses, such as share-based compensation expense, and preferred stock dividend

 

Less change in the fair value of derivative liability

 

The Company believes that Adjusted EBITDA is a meaningful indicator, to both Company management and investors, of the past and expected ongoing operating performance of the Company. EBITDA is a commonly used and widely accepted measure of financial performance. Adjusted EBITDA is deemed by the Company to be a useful performance indicator because it includes an add back of non-cash and non-recurring operating expenses which have little to no bearing on cash flows and may be subject to uncontrollable factors not reflective of the Company's true operational performance (i.e. fair value adjustments to the derivative liability).

 

  

While the Company uses EBITDA and Adjusted EBITDA in managing and analyzing its business and financial condition and believes these non-GAAP financial measures to be useful to investors in evaluating the Company's performance, it is open to certain shortcomings. EBITDA and Adjusted EBITDA does not take into account the impact of capital expenditures on either the liquidity or the financial performance of the Company and likewise omits share-based compensation expenses, which may vary over time and may represent a material portion of overall compensation expense. Due to the inherent limitations of EBITDA and Adjusted EBITDA, the Company's management utilizes comparable GAAP financial measures to evaluate the business in conjunction with EBITDA and Adjusted EBITDA and encourages investors to do likewise.

 

  

IGI LABORATORIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except shares and per share information)

 

		Three months ended December 31,
		2014				2013
Revenues:
Product sales, net		$	13,579			$	5,857
Research and development income			105				816
Licensing, royalty and other revenue			51				52
Total revenues			13,735				6,725
Costs and Expenses:
Cost of revenues			5,345				4,147
Selling, general and administrative expenses			2,413				1,406
Product development and research expenses			1,864				620
Total costs and expenses			9,622				6,173
Operating income			4,113				552
Other Income (Expense):
Change in the fair value of derivative liability			2,300				-
Interest and other expense, net			(608	)			(78	)
Income before income tax expense (benefit)			5,805				474
Income tax expense (benefit)			173				(197	)
Net income			5,632				671
Preferred stock dividend			-				(1,308	)
Net income (loss) attributable to common stockholders		$	5,632			$	(637	)
Basic income (loss) per share		$	0.11			$	(0.01	)
Diluted income (loss) per share		$	0.09			$	(0.01	)
Weighted average shares of common stock outstanding:
Basic			52,784,635				44,519,326
Diluted			67,167,566				44,519,326

 

  

IGI LABORATORIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31, 2014 and 2013

(in thousands, except shares and per share information)

 

		2014				2013
Revenues:
Product sales, net		$	32,104			$	16,981
Research and development income			1,490				1,094
Licensing, royalty and other revenue			146				149
Total revenues			33,740				18,224
Costs and Expenses:
Cost of revenues			16,948				12,079
Selling, general and administrative expenses			5,976				3,484
Product development and research expenses			6,910				2,743
Total costs and expenses			29,834				18,306
Operating income (loss)			3,906				(82	)
Other Income (Expense):
Change in the fair value of derivative liability			2,300				-
Interest and other expense, net			(782	)			(199	)
Income (loss) before income tax expense (benefit)			5,424				(281	)
Income tax expense (benefit)			173				(197	)
Net income (loss)			5,251				(84	)
Preferred stock dividend			-				(1,308	)
Net income (loss) attributable to common stockholders		$	5,251			$	(1,392	)
Basic income (loss) per share		$	0.11			$	(0.03	)
Diluted income (loss) per share		$	0.09			$	(0.03	)
Weighted average shares of common stock outstanding:
Basic			49,817,721				43,517,640
Diluted			64,207,190				43,517,640

 

  

IGI LABORATORIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2014 and 2013

(in thousands)

 

		December 31,				December 31,
		2014				2013
Cash flows from operating activities:
Net income (loss)		$	5,251			$	(84	)
Non-cash (income) expenses			(72	)			1,212
Changes in operating assets and liabilities			(8,976	)			(1,746	)
Net cash used in operating activities			(3,797	)			(618	)
Net cash used in investing activities			(3,792	)			(2,113	)
Net cash provided by financing activities			164,371				2,296
Net increase (decrease) in cash and cash equivalents			156,782				(435	)
Cash and cash equivalents at beginning of year			2,101				2,536
Cash and cash equivalents at end of year		$	158,883			$	2,101

 

  

IGI LABORATORIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share information)

 

		December 31, 2014				December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents		$	158,883			$	2,101
Accounts receivable, net			14,366				4,947
Inventories			2,784				2,869
Prepaid expenses and other receivables			1,185				641
Total current assets			177,218				10,558
Property, plant and equipment, net			3,262				2,623
Product acquisition costs, net			10,604				1,766
Debt issuance costs, net			5,132				69
Other			862				411
Total assets		$	197,078			$	15,427
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	1,643			$	1,523
Accrued expenses			5,141				2,915
Payable for product acquisition costs			6,000				-
Deferred income, current			87				768
Capital lease obligation, current			131				15
Total current liabilities			13,002				5,221
Convertible 3.75% senior notes, net of debt discount (face of $143,750)			100,311				-
Fair value of derivative liability - convertible 3.75% senior notes			41,400				-
Note payable, bank			3,160				3,000
Other long term liabilities			71				15
Total liabilities			157,944				8,236
Stockholders’ equity:
Series A Convertible Preferred stock, $0.01 par value, 100 shares authorized; 0 shares issued and outstanding as of December 31, 2014 and 2013, respectively			-				-
Series C Convertible Preferred stock, $0.01 par value, 1,550 shares authorized; 0 shares issued and outstanding as of December 31, 2014 and 2013, respectively			-				-
Common stock, $0.01 par value, 60,000,000 shares authorized; 52,819,787 and 46,748,575 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively			548				487
Additional paid-in capital			78,172				51,541
Accumulated deficit			(39,586	)			(44,837	)
Total stockholders’ equity			39,134				7,191
Total liabilities and stockholders' equity		$	197,078			$	15,427

 

  

IGI LABORATORIES, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(in thousands, except shares and per share information)

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2014				2013				2014				2013
Net income (loss) attributable to common stockholders		$	5,632			$	(637	)		$	5,251			$	(1,392	)
ADJUSTMENTS TO ARRIVE AT EBITDA:
Depreciation and amortization expense			216				103				532				407
Interest expense, net			268				70				406				167
Non-cash interest expense			261				-				261				-
Income tax expense (benefit)			173				(197	)			173				(197	)
EBITDA			6,550				(661	)			6,623				(1,015	)
ADJUSTMENTS TO ARRIVE AT ADJUSTED EBITDA:
Amortization of product acquisition costs			30				30				120				60
Stock-based compensation expense			520				367				1,170				536
Prefered stock dividend			-				1,308				-				1,308
Change in the fair value of derivative liability			(2,300	)			-				(2,300	)			-
ADJUSTED EBITDA		$	4,800			$	1,044			$	5,613			$	889